It really depends. Does any company have a firm grip on the niche? Or are they new/upstarts without a foothold?

If you're in a market without your solution, you may be able to target just your city with great results (for example, Portland has a few PDX-specific apps and rewards programs that do pretty well).

If your competition is already in your market, but you're filling one of their gaps, they may be interested in acquiring your idea — just make sure it's less work to acquire you than build their own version of the feature.

Even if you have direct competition, though, if you really believe in your idea you should just go for it. Foursquare and Yelp both have audiences. PayPal and Square and Stripe all have their own user bases. There's a lot of room in the world for great products.